IRS Audit Rates

It looks like there is a downside to being wealthy: tax audits.  The more you make, the more likely it is that you are going to be subject to and IRS audit.  The reality is, though, that for most of us, the audit rate is very, very low.  According to CNN Money, the wealthiest taxpayers have about a 1-in-3 chance of being audited whereas taxpayers who earn between $25,000 to $200,000 have 1% or less of a chance of an audit.

Be careful if you are notified of an audit.  I have been dealing with a number of cases lately where the taxpayer is forced to spend time and money to appeal or otherwise challenge an audit that could have been avoided with better audit management.  Ultimately, you can get the IRS to make the correct decision but you can also spend some money to get them to that point.